BQuick On Nov. 6: Top 10 Stories In Under 10 Minutes
This is a roundup of the day’s top stories in brief.
1. Biden Takes The Lead In Pennsylvania, Georgia
Democrat Joe Biden has taken the lead in Pennsylvania over President Donald Trump, putting him on the cusp of victory in the presidential race.
Hours before Biden took a 5,594 vote lead in Pennsylvania, he also narrowly overtook Trump in Georgia, a state that last selected a Democratic presidential candidate in 1992.
Pennsylvania has 20 electoral votes, meaning that if Biden wins the state, he will have more than the 270 Electoral College votes needed to claim the White House.
Votes remain to be counted in both states -- and also in Arizona and Nevada, where Biden maintains leads -- but more unofficial results were expected on Friday.
Follow the latest results from the U.S. election here.
U.S. Stock Rally Stalls
The global equity rally stalled on Friday, with U.S. stocks unwinding some of this week’s surge as the presidential election count continued.
The S&P 500 edged lower, after posting the biggest four-day rally since April.
West Texas Intermediate crude decreased 2.4% to $37.87 a barrel, the biggest dip in more than a week.
Bonds fell with the Labor Department saying nonfarm payrolls increased by 638,000 after an upwardly revision the prior month.
Get your daily fix of global markets.
2. Flexi-Cap Mutual Funds Are Here!
The market regulator created a new 'flexi-cap fund' category, giving asset managers more leeway on composition of equity schemes after changes in allocations earlier in the year reduced flexibility for multi-cap funds.
The newly created category requires a minimum investment into equity and equity-related instruments worth 65% of total assets, the Securities and Exchange Board of India said in a circular on Friday.
As the name flexi-cap suggests, it will allow the mutual funds to invest in the equity of companies irrespective of market capitalisation.
But will the new regulation benefit investors? Find out here.
3. Graded Regulatory Framework For NBFCs?
A graded regulatory framework may be needed for India’s growing and diverse non-bank lending segment to strike a balance between the need to ensure financial stability while leaving enough flexibility for innovation, according to Rajeshwar Rao, who has recently taken over as deputy governor at the Reserve Bank of India.
Speaking at an event organised by Assocham, Rao said there’s a view that any regulatory framework would ideally be designed according to the principle of proportionality.
By extension, it can be argued that the spill-over risks from a large systematically important NBFC must be dealt with in a proportionate manner and these entities should be subjected to a higher degree of regulation.
Given their diverse needs, there may be no “one-size-fits-all” prescription in the regulatory approach for NBFCs, Rao said.
4. No Festive Cheer For Automakers Yet
Automakers pushed inventories to dealerships ahead of the festive season in October anticipating a pick-up in sales but data from the ground isn’t encouraging.
Factory-gate shipments of cars, two-wheelers, commercial vehicles and tractors were significantly higher than retail sales in the last two months, leading to a build-up in inventory levels which has crossed the 30-day mark.
Vehicles registered during the nine-day Navratri festival remained 11.5% lower than last year, according to data from the Ministry of Road Transport and Highways.
Retail sales rose but are still way below pre-Covid levels.
5. How Vedanta And Cipla Fared In Q2
Vedanta Ltd. saw a sharp fall in profit due to lower commodity prices and fewer sales in its oil and gas business.
Net profit fell 61.8% to Rs 824 crore.
Revenue fell 3.8% to Rs 21,107 crore.
Margin expanded to 30.9% from 20.1% earlier.
The metals and mining giant also saw its debt rise in the quarter.
Cipla Ltd. saw its profit rise due to higher sales and lower other expenses.
Revenue rose 14.6% to Rs 5,038.3 crore.
Net profit rose 41.17% to Rs 665.4 crore.
Read more here.
6. Nifty, Sensex Near Record Highs
Indian equity markets continued their march towards record high levels, ending higher for the fifth straight day.
The S&P BSE Sensex closed 1.3% higher at 41,893 after briefly clearing a record high set in January.
The index is 380 points away from its all-time closing high of 42,273.
The NSE Nifty 50 turned positive for 2020, ending 1.2% higher at 12,263.
The index is 167 points away from its all-time high of 12,430.
Follow the day’s trading action here.
Trump Or Biden? Does It Matter To Indian Markets?
While the outcome of a hard-fought U.S. presidential race comes down to a handful of states, IIFL Group’s Nirmal Jain said it doesn’t matter if Joe Biden or Donald Trump are elected—as far as India is concerned.
“All things put together, I don’t think it makes much of a difference to India except that how stable the global markets are because that will determine the flow of capital to India,” Jain told BloombergQuint.
There are other reasons why Jain expects India to become an investment destination for the globe. Find out here.
7. The Post-Pandemic Lipstick, Er..., Hair Colour Effect
If women see no point in wearing lipstick underneath a facemask, they will colour hair instead. Godrej Consumer Products Ltd., maker of namesake hair dyes and colours, is banking on this version of the ‘lipstick effect’.
“Unlike global markets, India has always been a grey coverage market…,” Nisaba Godrej, chairperson and managing director of Godrej Consumer, told BloombergQuint in an interview.
“We feel it [hair colours] will do very well especially now because people are now wearing masks, we almost feel that some of the lipstick market will shift to hair to express yourself. It is very early days; expressing yourself during this time will also be a tailwind,” she said.
The pandemic has also driven demand for eyeliners, mascaras, foundations and nail enamels. More here.
8. Reprieve For Cash-Strapped SpiceJet
Supreme Court stayed an order directing SpiceJet Ltd. to deposit Rs 243 crore ($32.5 million) with a lower court, a relief for the cash strapped low-cost carrier.
A three-judge bench headed by Chief Justice Sharad A. Bobde agreed to SpiceJet’s request to put on hold a Delhi High Court order to deposit the money, saying there was no precedent for such a directive to be given.
The bench will hear the case again after another four weeks.
9. American Exceptionalism Is Defunct, Says Ian Bremmer
The incredible divisiveness, the de-legitimisation of the election, the erosion of U.S. political institutions, that is perhaps the most significant takeaway of the year and of the election, said Ian Bremmer, political scientist and founder of Eurasia Group.
Assuming a Biden-Harris win, Bremmer said the absence of a Blue Wave, no Senate majority and a narrower majority in the House of Representatives would create a gridlock that would limit the Democratic reform agenda on issues like the economic stimulus, climate change, healthcare and more.
“Just the idea that you have a president that will have won by five million votes and will not be able to move forward on any reforms that he personally wants to see is kind of unheard of in a democracy in the world today and yet it’s exactly what you are going to be seeing in the U.S. next year,” Bremmer said.
But maybe, as important as the fissures, are the implications of the establishment’s failure to, yet again, read public sentiment right.
10. China Tussle Could Start Wider Conflict, Warns Defence Chief
India’s escalating border tensions with China could lead to a wider conflict, Chief of Defence Staff Bipin Rawat said, adding to concerns for a nation that’s been battling another neighbour to its west for decades.
“In the overall security calculus border confrontations, transgressions, unprovoked tactical military actions spiraling into a larger conflict, therefore, cannot be discounted,” Rawat said in his address at New Delhi’s National Defence College on Friday.
“The situation along Line of Actual Control in Eastern Ladakh remains tense,” he said.
Rawat also warned India may have to reckon with twin conflicts at the same time along its western and northern borders.